Persistent regional inequalities and productivity in Northeast Brazil: simulation-based evidence for the 2030 Agenda

Abstract

Using the Sustainable Development Goals (SDGs) and the 2030 Agenda as a reference framework, this paper assesses whether productivity gains and reductions in income inequality are sufficient to accelerate economic convergence and improve social outcomes in Brazil’s Northeast. To do so, we employ a state-level adaptation of the International Futures (IFs) model to simulate alternative development scenarios for Brazilian states through 2030. The results indicate that productivity-enhancing policies generate substantial gains in economic growth and contribute to reducing poverty, particularly when combined with more equitable income distribution. Nevertheless, regional disparities remain remarkably persistent. Even under the most optimistic scenario, no Northeastern state reaches 75% of the national per capita GDP by 2030, a benchmark commonly associated with regional convergence policies. While extreme poverty declines significantly, it is not fully eradicated. These findings suggest that broad-based productivity and equity improvements, although necessary, are insufficient to overcome longstanding territorial inequalities. Achieving the SDGs in a highly heterogeneous country such as Brazil requires place-based regional development policies capable of addressing structural constraints and fostering stronger economic convergence across regions.